Reward processing: Mesocorticolimbic dopamine (DA) activity mediates rewarding/ reinforcing aspects of abused drugs. Nicotinic receptors are located presynaptically on, among other places, DA terminals, although the role of nicotinic modulation on reward processing is unclear. We performed experiments to determine neurobiological mechanisms underlying reward processing in smokers, schizophrenia (SZ) patients and cocaine dependent individuals (ongoing). Temporal difference error (TDE) processing and reward expectation/outcome using a monetary incentive paradigm (MID) are employed in each population. Smokers were scanned under nicotine patch and placebo. There was a significant learning (negative TDE) effect in the thalamus, insula and medial prefrontal cortex (MPFC), with mildly abstinent smokers showing a smaller response than controls. Decreased function was also seen in the striatum, but not in the substantia nigra or MPFC. After nicotine, a reduction in MFPC activity was seen in smokers. Using the MID task, activity in the striatum varied as a function of group, with smokers in both conditions showing greater valence and magnitude related activation in striatal subdivisions. There was no group or drug effect on MPFC activity to rewarding outcomes, but activation in the NAcc was greater to win stimuli in smokers post-nicotine vs. placebo. Thus, in reward processing regions there is dissociation between nicotines effects upon reward anticipation and outcome. Smokers showed trait and state-specific effects of nicotine on the processing of valence and magnitude of upcoming rewards and punishments in the striatum, but no differences in the processing of reward or punishment receipt in the MPFC, which may be linked to the psychological dissociation between desire to smoke vs. the hedonic experience of smoking. Schizophrenia: Psychosis is associated with aberrant brain activity concurrent with anticipation and integration of monetary outcomes. Controls show greater activation for gains relative to losses in the MPFC, LPFC, lateral temporal cortex, and amygdala. In the striatum, neural activity was modulated by outcome magnitude in both groups. Ratings of negative symptoms in patients correlated with sensitivity to obtained losses in MPFC, obtained gains in LPFC, and anticipated gains in striatum. The systematic relationships between clinical symptoms and neural responses to stimuli associated with rewards and punishments suggest that reward-related neural responses may provide sensitive probes of treatment effectiveness. DA system dysfunction is involved in negative symptoms of SZ, such as avolition and anhedonia. There was a difference in the positive-negative TDE contrast in the putamen and precentral gyrus, midbrain, insula, parietal and frontal operculum. Group differences were driven by attenuated responses in patients to positive TDEs;responses to negative TDEs were largely intact suggesting that patients show abnormal responses associated with the processing of a primary reinforcer, which may be a source of motivational deficits. Loss aversion in smokers is indexed by inverse responses to monetary gains and losses. Loss aversion, a greater sensitivity to losses than gains of equal magnitude, guides decision-making. Drug users show altered patterns of aversion to risk and reward, but the relationship between loss aversion and addiction is unclear. In the MID task, subjects exhibited loss aversion for arousal ratings (excited/distressed). An interaction between drug condition and type of outcome (hit/miss) was observed in 14 regions. Placebo condition yielded relatively greater activation to miss than hit trials in each of these regions. Nicotine condition showed increased activation to hit trials, decreased activation to miss trials, or both. Correlations by drug condition showed significant associations between loss aversion and activation in 6 areas, suggesting nicotine modulates neural responses to monetary gains and losses, and that nicotine may heighten the experience of positive events and dampen the experience of negative ones. After gains, sated smokers exhibit a relationship between loss aversion and activation in cognitive regulation (BA9) and memory (parahippocampal gyrus) areas. In abstinent smokers, the relationship between loss aversion and neural response is limited to deactivation in the insula, extending its role in negative affect. After losses, sated smokers exhibit a relationship between loss aversion and activation in the MD thalamus, possibly involved in emotional processing. For gains, loss aversion and nicotine may offer cognitive processing advantages to smokers. Cognitive Processing in MDMA (ecstasy) Users: A semantic task (exemplar-category) was used to evaluate cognitive decision-making in MDMA users. The semantic task showed no performance differences between groups under placebo condition. However, more errors and longer RT occurred in the category-exemplar pairs where the largest activations occurred, while lesser activation is seen in the in category and out of category conditions for IFG, inferior parietal lobule, thalamus, inferior frontal gyrus, and caudate. The largest deactivations occurred for the category-exemplar pairs with lesser activations in the in category and out of category conditions for MFG, and precuneus. Neural Correlates of Distress Intolerance (DI): A substance dependent individual in the initial stages of an abstinence attempt, who is experiencing increases in withdrawal induced affective distress, is likely to relapse as a means of temporarily alleviating emotional distress. DI, the inability to persist in goal directed activity while experiencing affective distress, is implicated in substance use outcomes. Repeated and chronic drug use leads to neuroadaptations in stress and reward circuitry, resulting in chronic elevations in affective distress. During times of high stress and arousal, when prefrontal regions are activated and connections between the ACC and limbic regions are strong, there may be good inhibitory control and low levels of craving. However, reduced functioning in the PFC and ACC, or weak connectivity within the cortico-striatal-limbic circuit, limits inhibitory control and allows for habitual and automatic responses in times of stress. In response to a distress-inducing task, we found increased activation of corticolimbic circuits involved in emotion regulation and impulsivity is associated with increased scores on the BIS motor subscale. Increased RAI activation in response to distress predicted higher motor impulsivity, but only in subjects who also show elevated cortical activation, specifically in the ACC. This suggests impulsive individuals may need more regulatory input from this region to inhibit their actions, suggesting a neural basis by which some are at greater risk of acting impulsively during affective distress than others. Further, DI was associated with a concurrent increase in amygdala activation and decrease in MPFC activation indicating that maladaptive behavioral responses occur when prefrontal activation crucial for planning and executing an appropriate behavioral response during an emotional situation is limited. Effects of Prenatal Drug Exposure on Adolescent Brain Functioning: We compared brain activity of adolescents exposed to drugs in utero to healthy adolescents performing tasks that tap into risky decision making and working memory. Drug exposed adolescents fail to activate areas normal adolescents engage during WM and deactivate a region not engaged in normal adolescents. Further, resting connectivity between amygdala and DLPFC exists in drug-exposed adolescents, but not in the comparison adolescents while connectivity between NAcc and several cortical regions follows a different developmental trajectory in drug